Mysteel studies: Shutdown and resumption of blast furnace production in August and plan for September

In August, as the steel plants gradually turned from losses to profits, blast furnaces that stopped production last month due to losses have resumed production one after another, and the hot metal production shows a trend of continuous and substantial recovery. According to our statistics, at the end of the month, the weekly average daily hot metal output of China's 247 steel plants increased by 150000 tons/day compared with the beginning of the month, benefiting steel plants' 52% gross profit turned from negative to positive. Graphite electrode is widely used in electric arc furnace steelmaking, which has strong thermal and electrical conductivity.This paper mainly reviews steel plants' production in August, and makes a pre-survey and forecast of next month output.

Ⅰ. In August, Mysteel made statistics on 247 blast furnaces' production suspension and resumption

From the specific data, as of August 26, the total hot metal output of 247 steel plants increased by 1.26 million tons month-on-month, to 69.82 million tons, a cumulative decrease of 30.48 million tons year-on-year, a decline of 5.27%. The average daily output of molten iron was 2.52 million tons/day, up 41,000 tons/day, an increase of 1.8%. In terms of regions, The output growth in August is mainly concentrated in North China, East China and Northwest China,  while the output in Northeast and central China decreased. 

Judging from the shutdown and overhaul of blast furnaces, as of August 25, 77 new furnaces were added by 247 steel plants in August, involving an average daily molten iron production capacity of 270000 tons day, among which, 46 enterprises stopped production in July due to the impact of profits, involving a production capacity of about 150000 tons/day. In terms of regions, they are mainly concentrated in Shanxi, Hebei, Jiangsu, Henan and Shandong. A total of 21 blast furnaces were shut down, involving an average daily molten iron production capacity of 80000 tons/day, which is mainly concentrated in Hebei, Liaoning and Inner Mongolia. It is understood that the shutdown of blast furnaces is partly due to profit losses and partly due to production restrictions.

 Ⅱ. In September, blast furnace molten iron output of the steel plant is expected to be 2.34 million tons/day

According to Mysteel's research, it is planned to resume production of 20 blast furnaces in September, involving a capacity of about 60,000 tons/day, among which, 8 blast furnaces were shut down in July due to profit impact, involving a capacity of about 30,000 tons/day.It is planned to shut down 3 blast furnaces for maintenance, with a production capacity of about 10000 tons/day.

According to calculations, if production is resumed as planned, it is estimated that blast furnaces' hot metal output in steel plant will be 2.34 million tons/day in September, an increase of 90000 tons day over the average daily output in August. It is worth noting that the current profit level of the steel plant still supports the steel plant production, but we need to pay attention to the profit fluctuation of the steel plant in September and whether there will be temporary production restrictions near autumn and winter.

Remark:

The above calculation results based on the current investigation of steel plant suspension and resumption plan, combined with steel plant current production, shows that under the condition of low production efficiency, the uncertainty of steel plant production increases, while specific situation needs to pay attention to steel plant profit changes. Welcome to inquire about steel market policy guidance.